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HomeFix and Flip Loans – The One West Difference

Fix and Flip Loans – The One West Difference

Fix and Flip Loans – The One West Difference

For real estate investors, fix and flip loans provide the necessary funding to purchase, renovate, and resell properties for profit. These specialized loans—offered by hard money lenders—are designed for quick transactions, flexible terms, and projects with short timelines. Whether you’re a seasoned real estate investor or exploring your first flip property, fix and flip loans empower you to seize opportunities and scale your operations.
This guide explains everything you need to know about flip loans, including how they work, their benefits, and why One West Hard Money is the premier lender for flip financing.

What Are Fix and Flip Loans?

Fix and flip loans are short-term loans tailored for flip projects, allowing investors to purchase distressed properties, renovate them, and sell them at a profit. These loans focus on the after-repair value (ARV) of the property, providing the capital needed to cover both the purchase price and renovation costs.
Typically structured as hard money loans, fix and flip loans prioritize speed and accessibility over the strict requirements of traditional financing, making them ideal for real estate investors who need to act quickly.

Key Features of Fix and Flip Loans

Quick Approval

Approvals typically occur within days, giving investors a competitive edge when bidding on flip properties.

Short Loan Terms

Loan terms typically range from 3-10 months, aligning with the short timelines of most flip projects.

Flexible Loan Amounts

Loan amounts are based on the property’s after-repair value, ensuring adequate funding for both purchase and renovations.

Higher Interest Rates

Interest rates usually fall between 10+%, reflecting the loan’s short-term nature and focus on speed.

Loan-to-Value (LTV) Ratios

Lenders typically offer 60-80% LTV, ensuring loans are secured by the property’s potential value.

How Fix and Flip Loans Work

Fix and flip loans are structured to support two distinct phases of a project:

Purchase Phase

  • Investors secure funding to buy distressed properties below market value.
  • Lenders evaluate the property’s ARV to determine the loan amount.

Rehab Phase

  • Funds cover renovation costs, transforming the property into a desirable home.
  • Once the property is sold, the loan is repaid, and the investor retains the profit.

Comparing Fix and Flip Loans to Other Financing Options

Fix and Flip Loans vs. Hard Money Loans

While all fix and flip loans are a type of hard money loan, not all hard money loans are designed for flipping houses. Fix and flip loans are specifically tailored for short-term projects, focusing on fast turnarounds and renovation funding.

Fix and Flip Loans vs. Bridge Loans

Bridge loans provide temporary financing for property purchases or transitions, but fix and flip loans are designed for flipping houses, covering both purchase and renovation costs.

Fix and Flip Loans vs. Home Equity Loans

Home equity loans require existing equity in a property, making them better suited for investors leveraging current assets. Fix and flip loans are ideal for properties without existing equity.

Fix and Flip Loans vs. Rental Loans

Fix and flip loans are designed for short-term resale projects, while rental loans cater to investors holding properties for long-term rental income.

Benefits of Fix and Flip Loans

Speed and Accessibility

Fix and flip loans offer fast approvals and fewer requirements, making them accessible to investors who may not qualify for traditional loans.

Tailored for Flip Projects

Loan terms of 3-10 months align perfectly with the typical duration of a flip project.

ARV-Based Lending

Loan amounts are calculated based on the property’s future value, ensuring adequate funding for renovations.

Flexible Loan Terms

Options like interest-only payments during the renovation phase provide financial breathing room.

Common Challenges of Fix and Flip Loans

Higher Interest Rates

Rates of 10+% can eat into profits if projects face delays. Proper planning minimizes this risk.

Short Loan Terms

Loan terms ranging from 3-10 months require investors to adhere to strict timelines to avoid penalties.

Unanticipated Costs

Budget overruns can reduce profitability. Always include a contingency fund in your planning.

Tips for Success with Fix and Flip Loans

Accurate Budgeting

Account for purchase price, renovation costs, holding costs, and the loan’s interest rate to calculate the total investment.

Thorough Market Analysis

Ensure the flip property is in a desirable location and priced correctly for the local market.

Reliable Partners

Work with experienced contractors and a trusted lender, like One West, to keep your flip project on track.

Contingency Planning

Set aside 10-20% of the project’s budget for unexpected expenses during renovations.

Why Choose One West for Fix and Flip Loans?

One West specializes in providing fix flip loans tailored to the unique needs of real estate investors. Here’s what makes us the preferred choice for flip financing:

Fast Approvals

Get funding in as little as 48 hours to secure flip properties quickly.

Competitive Interest Rates

We offer fair rates, ensuring your project remains profitable.

Flexible Loan Terms

Options like interest-only payments help you manage cash flow during renovations.

ARV-Based Lending

We provide funding based on your property’s potential, not just its current value.

Final Thoughts

Fix and flip loans are indispensable for real estate investors looking to turn distressed properties into profitable assets. With their fast approvals, ARV-based funding, and tailored terms, these loans empower investors to complete flip projects efficiently and scale their operations. Partnering with a trusted lender like One West ensures you have the support and resources needed for success.

Ready to start your next flip? Contact One West today to learn more about our fix and flip loan options and take your real estate investments to the next level.

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(314) 898-8687

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Address

12095 Manchester Road, Suite 2A
St. Louis, MO 63131

 

 

 


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